Trade war: China allegedly stops exports of several rare earths completely
At the beginning of April, China banned the export of several rare earths that are irreplaceable for some industries.
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According to a report in the New York Times, China has begun to ban the export of numerous rare earths, not only to the USA, but as a whole. According to the US newspaper, these are the raw materials whose export was already restricted by the leadership in Beijing on April 4. The export ban is now being implemented at many Chinese ports, while the government is still working on a new set of regulations to allow exports again. As this will take time, supplies could soon dry up, affecting not only the USA but also Japan and Germany, writes the newspaper. The raw materials are key to the construction of cars, airplanes, semiconductors and military technology, among other things.
Stricter controls at many ports
The export controls imposed a week and a half ago concern the elements samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium, the news agency Reuters reported at the time. Contrary to some reports, they already applied to all countries, not just the USA, although this was in response to the massive tariffs imposed by US President Donald Trump on all goods from China. According to the New York Times, the implementation of the export ban has so far been inconsistent and has been handled differently depending on the port, but the regulations are now being implemented more and more strictly. They have been in full force since last Friday.
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Rare earths are essential for the manufacture of many high-tech products and China has dominated the global market for some time now. For the People's Republic, they only account for a small proportion of exports, so the export ban is causing little economic damage in the country. At the same time, it is likely to have a significant impact on various industries around the world. Although some manufacturers have built up stocks in preparation for the trade war, these will not last forever. According to the US newspaper, it is expected that it could be weeks before the promised new regulations are in place and export licenses are issued again. In the worst-case scenario, some factories would have to suspend production until then.
The export ban could therefore potentially escalate the conflict between China and the US, with consequences for the global economy. Last week, the US President paused his massive tariff package against the vast majority of countries in the world and suspended some of the additional tariffs imposed for 90 days. However, this did not apply to China; instead, Trump is taking even tougher action against the People's Republic: While the US is now demanding additional tariffs of 145 percent on imports from China, Beijing is now imposing 125 percent on US goods for its part. There is no agreement in sight.
(mho)
